ENG-1984 — Page 129

THE ECONOMY

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in Hong Kong. The director's appointment, tenure of office, duties and powers are set out in the Audit Ordinance, which also provides that he shall not be subject to the direction or control of any other person or authority.

The Director of Audit's report on the annual accounts of the government is submitted to the Governor as President of the Legislative Council for tabling. It is then referred to the Public Accounts Committee, comprising a chairman and six members, all of whom are unofficial members of the Legislative Council. In the exercise of its authority, the committee may call any public officer or other person concerned to give information and explanations and to produce any documents and records which it may require. Up to 1983, the committee held all its meetings in camera but this was changed in 1984 and hearings are now held in public except where the committee is of the opinion that the public interest requires confidentiality. The report by the Public Accounts Committee on the Director of Audit's report relating to the accounts of the government is also tabled in the Legislative Council. Both are copied to the Secretary of State.

The Economy in 1984 –

In comparison with 1983, economic performance in 1984 was characterised by higher GDP growth, moderating inflation, improved employment and a much reduced visible trade gap. These were largely the result of the rapid expansion in the export sector and the relative stability of the Hong Kong dollar in terms of the US dollar during the year. Partly reflecting this, earnings increased both in money terms and in real terms, and private consumption improved. Nevertheless, there were a few problem areas, including a generally sluggish property sector mainly influenced by the over-supply problem in the last few years and the new country-of-origin rules imposed in September by the United States Govern- ment which could adversely affect domestic exports of textiles and clothing to this market. For 1984 as a whole, the preliminary GDP estimate indicated a growth rate of 9.6 per cent in real terms, which was considerably higher than the provisional estimate of 5.1 per cent for 1983. As in the previous year, economic growth in 1984 was export-led. This was in contrast to the years 1980 to 1982 when domestic demand was the main source of growth. The export sector showed an impressive growth rate in 1984, largely due to the sustained recovery in the economies of several of Hong Kong's major markets, particularly the United States. Taking the year as a whole, domestic exports grew by 32 per cent in money terms or roughly 17 per cent in real terms. Domestic exports to the United States, Hong Kong's largest export market, increased by about 21 per cent in real terms. Considerable increases were also recorded in other major markets, including China (59 per cent), the United Kingdom (eight per cent), the Federal Republic of Germany (six per cent) and Japan (25 per cent). As a result of the very rapid increase in domestic exports to China, that country overtook the United Kingdom and the Federal Republic of Germany to become Hong Kong's second largest market, though still well behind the United States.

In terms of major commodities, domestic exports of clothing increased by about 14 per cent and of textiles by roughly four per cent in real terms in 1984. Domestic exports of other products also increased, by about 20 per cent in real terms, with electronic components and domestic electrical appliances showing the fastest growth rates.

The entrepôt trade also expanded rapidly in 1984, with re-exports increasing by 48 per cent in money terms or about 30 per cent in real terms. China remained the largest market for Hong Kong's re-exports, followed by the United States, Taiwan, Singapore, Japan and Indonesia. It was also the most important source of the goods re-exported through Hong Kong, followed by Japan and the United States. The major end-use categories of goods